Brinker International (NYSE:EAT) reported first-quarter fiscal 2027 revenue of $1.476 billion and adjusted diluted earnings per share of $2.77, up 44% from $1.93 a year earlier, as Chili’s posted another quarter of traffic-led same-store sales growth.
Chief Executive Officer and President Kevin Hochman said Chili’s same-store sales increased 10% during the quarter, outperforming the casual-dining industry by 720 basis points. The result followed Chili’s comparable-sales increases of 21% in the first quarter of fiscal 2026 and 14% in the comparable period of fiscal 2025, producing a three-year cumulative comp increase of 52%.
Value, marketing and operations drive Chili’s performance
Hochman attributed Chili’s momentum to guest-experience improvements and its everyday-value strategy. He said the company’s “flywheel” of traffic growth, sales growth, margin expansion and reinvestment remains central to its approach.
The Big Crispy Chicken Sandwich was a key traffic driver in the quarter, management said. Chili’s continued to sell approximately 55 of the sandwiches per restaurant per day, matching its fourth-quarter pace. The sandwich is priced at $10.99 as part of a complete meal offering, which Hochman said compares favorably with fast-food alternatives.
Chili’s also made several menu updates, including switching to Blue Bell ice cream, adding sausage to its pasta menu, returning cheesecake, and refreshing its Pepper Pals children’s menu. On operations, the company emphasized simplifying restaurant work, improving execution on existing menu items and retraining teams on labor scheduling and pasta preparation.
Chili’s Google rating reached an all-time high of 4.3 during the first quarter, Hochman said. The company also removed GWAP from its general manager bonus structure during the period, while continuing its customer-experience initiatives.
Management said it expects Chili’s to produce mid-single-digit comparable-sales growth in the second quarter, even as it laps a strong prior-year period. Ware said October had begun with high-mid-single-digit same-store sales growth, led primarily by positive traffic.
Hochman acknowledged consumer pressure from gasoline prices and interest rates, saying the company has seen some mix slippage as consumers manage spending. However, he said Chili’s traffic gains suggest consumers are choosing brands they trust when dining out less frequently.
Maggiano’s sales decline, but banquet business improves
Maggiano’s reported first-quarter same-store sales declines of 3.4%, including a 5.1% traffic decline. Pricing added 2% while mix declined 0.3%.
Still, Brinker highlighted progress in Maggiano’s banquet business, where sales increased 11% from a year earlier. Banquets represent about 15% of Maggiano’s sales. Hochman said the company restored banquet sales-manager staffing that had been reduced during the COVID period, streamlined execution and created single-point accountability for the planning and event experience.
Management is also testing Chili’s kitchen display system technology at one Maggiano’s restaurant. Hochman said the system could improve food temperature, timing, coordination between kitchen stations and restaurant productivity if it is successfully deployed more broadly.
Margins expand and outlook increases
Brinker’s restaurant operating margin was 17.7% in the first quarter, an improvement of 150 basis points from a year earlier. Ware said sales leverage drove the improvement, partly offset by commodity inflation and higher hourly labor costs.
- Food and beverage costs were unfavorable by 10 basis points, reflecting 3.3% commodity inflation and unfavorable menu mix.
- Labor was favorable by 90 basis points as sales growth and productivity more than offset wage inflation of roughly 2.6% and additional labor investments.
- Restaurant expenses improved by 70 basis points, as sales leverage offset higher repair and maintenance, advertising, insurance, rent and inflation-related costs.
- First-quarter adjusted EBITDA rose 21.3% year over year to about $209.1 million.
Ware said Brinker has included approximately $7 million of pressure from higher oil prices and freight costs in its updated outlook, primarily within restaurant expenses. The company expects full-year labor inflation to be closer to 3%.
Brinker raised its fiscal 2027 targets following first-quarter outperformance. The company now expects:
- Annual revenue of $6.23 billion to $6.33 billion.
- Adjusted diluted EPS of $13.30 to $13.90.
- Weighted average shares of 42 million to 43 million.
- Capital expenditures of $265 million to $285 million.
The outlook continues to include the impact of a 53rd operating week in the fourth quarter, which management estimates will add roughly 2% to total revenue and $0.70 to earnings per share.
Reimages, unit development and capital returns
Brinker has completed 20 Chili’s restaurant reimages and has 13 more under construction. The company expects to complete 60 to 80 reimages in fiscal 2027, followed by a planned cadence of reimaging 10% of the fleet annually beginning in fiscal 2028.
Ware said remodel costs are currently expected to range from $500,000 to $600,000 per restaurant, with estimated sales lifts of 3% to 5%. She said early returns are covering the cost of capital, though the company is still evaluating results and seeking cost efficiencies.
The company also reiterated plans to target 2% to 3% annual unit growth by fiscal 2029. Brinker identified more than 300 potential trade areas for new development, including underpenetrated markets in Washington and the Pacific Northwest, infill opportunities in Texas and Florida, high-growth secondary markets such as the Carolinas, and smaller towns.
Brinker expects modest unit growth in fiscal 2027 before a more significant ramp in fiscal 2028. During the first quarter, the company repurchased $125 million of common stock under its share-repurchase program.
Management also outlined a multiyear effort to improve carryout and delivery operations. Off-premise sales, consisting of delivery and carryout, each account for roughly 12.5% of company sales. Planned initiatives include improving quoted order-ready times, making reordering easier, enhancing pickup experiences, upgrading packaging and improving order accuracy.
About Brinker International (NYSE:EAT)
Brinker International, Inc is a casual-dining restaurant company that owns, operates and franchises restaurants in the United States and select international markets. The company is headquartered in Dallas, Texas, and serves customers through company-operated and franchised locations.
Brinker’s principal brands are Chili’s Grill & Bar and Maggiano’s Little Italy. Chili’s offers a broad menu of burgers, steaks, ribs, fajitas, Tex-Mex dishes, salads and beverages in a full-service, casual setting.
